The scheme against gold is against all commodities as well


Chairman Greenspan, Justify Yourself

Chris Powell of the Gold Anti-Trust Action
Committee provides details of the case
against the brokers and the U.S. government
for the manipulation of the price of gold.
And he explains the dynamic of the suspicious

By Guido Bellosta
Borsa & Finanza, Italy
February 9, 2002

An important trial is celebrated in these
days in the United States. The judge,
Reginald Lindsay of U.S. District Court in
Boston, must decide on the admissibility of
the case brought by the Gold Anti-Trust
Action Committee (GATA) against the principal
international brokerage houses and the
American federal government, accused of
having conspired among themselves to
artificially maintain a low price of gold
through a manipulation of the price started
about 10 years ago.

GATA is a non-profit corporation recognized
by the American government and founded by
commodities trader Bill Murphy in 1998 to
give voice to his doubts about the anomalous
behavior of the price of the gold on the
international markets.

Joining him side by side is an editor from
Connecticut, Chris Powell, and now the
secretary-treasurer of GATA. Borsa and
Finanza has asked Powell to furnish some
details on the case in progress.

Question: What caused you to bring the
federal authority to a court of justice?

Answer: The decision to accuse the principal
brokerage houses and the Federal Reserve
Board goes back to a study published by
Lawrence Summers, then professor at the
University of Harvard, who became secretary
of the treasury in the Clinton
administration, that analyzed the inverse
correlation between the international price
of gold and the trend of the rates of

Q: What did you deduce from the study?

A: First, the authorities have used the
practice of maintaining low interest rates to
deceive the markets on the real rate of
inflation for more than a decade.

Q: With what effects?

A: The low price of the gold has subjected to
price controls the prices of raw materials,
permitting an increase in the wealth of the
industrialized countries and an increase in
the poverty of the developing countries.

Q: How did the intervention happen in the

A: Through leasing, the American government
guaranteed substantial gold availability to
the operation. According to data published by
the World Gold Council, the United States had
available at the beginning of 2002 8,149 gold
tons, Germany 3,456 tons, the International
Monetary Fund 3,217 tons, France 3,024 tons,
and Italy 2,451 tons. The use of derivatives
facilitated the sinking of the price and the
closing of the positions with substantial
profit for a lot of bullion banks that
notoriously have relationships with the
government, of which the J.P. Morgan/Chase
investment bank stands out.

Q: However, the American government has
always denied lleasing of the yellow metal.

A: Yes, but GATA considers that such practice
is happening through the very confidential
Exchange Stabilization Fund of the Treasury

Q: What is the status of the lawsuit?

A: The decision of the District Court on the
admissibility of the case may be imminent.
But if the response is perhaps negative, our
success may be assured by the publicity that
we have obtained. Very few financial
institutions are prepared to follow in the
strategy of the containment of the gold
price, because now they are under the eyes of
the analysts and the investors.

Q: What effect will the end of the
manipulation have on the gold price?

A: It could provoke the doubling of the price
of gold. The owners of mining stocks could
see a 10-fold increase in the value their
investments. Naturally, GATA advises people
to avoid miners that have sold forward gold
not yet extracted from the ground, because
they will not profit as much from a rise in
the gold price.

Q: What actions at the international level
could strengthen the GATA initiative?

A: Parliaments of all nations should ask for
the details of the completed gold operations
from the central banks. Eventually gold
leasing should be blocked. The international
gold market must be free. It's not
understandable why the anti-trust laws are
used against the pharmaceutical companies for
manipulating the price of vitamins or against
the possible collusion between Sotheby's and
Christy's in the auction business while
forgetting the most enormous manipulation in
the last decade in commodities.


If you benefit from GATA's work, please
consider making a financial contribution.
GATA welcomes contributions as follows.

By check:

Gold Anti-Trust Action Committee Inc.
c/o Chris Powell, Secretary/Treasurer
7 Villa Louisa Road
Manchester, CT 06043-7541

By credit card (MasterCard, Visa, and
Discover) over the Internet:

Donors of $200 or more will, upon request, be
sent a videotape of GATA's February 12, 2002,
press conference at the National Press Club in

Donors of $750 or more will, upon request, be
sent a print of Alain Despert's colorful painting
symbolizing our cause, titled "GATA."

GATA is a civil rights and educational
organization under the U.S. Internal Revenue Code
and contributions to it are tax-deductible in the
United States.